Adecco hopes to grow in Europe despite the increase in profits

The Swiss group Adecco, the world leader in temporary work, is expected to report a slowdown in growth in the third quarter, despite a jump in profits, which is facing a slowdown in employment in Europe.

For the period from early July to the end of September, revenue growth was limited to 2% to € 5.9 billion, compared with 4% in the previous quarter, the group said in a statement. And this slowdown continued, with combined growth in September and October, which reached only 1%, Adecco added, who first saw the downward trend.

However, its profit more than doubled, with a jump of 119% to 270 million euros, mainly due to the profit from the sale of its shares in Beeline, a platform that offers tools for managing temporary staff for businesses. Profit on this sale amounted to 113 million euros, it quantified.

However, this profit is well above the expectations of analysts by the AWP Swiss agency, which on average expected 220 million, which supported the measure, which stood at 2.33% to 1321 GMT and reached 49.15 Swiss francs. For comparison, the SMI, the index of the reference value of the Swiss stock exchange, lost 0.41%.

This revenue reduction was generally expected. In mid-September, Adecco has already stated during the Investor Day that the rate of hiring for temporary jobs is interrupted in the summer by steam.

-Three months "hard" –

In addition, its main competitors, American Manpower and the Dutch Randstad, recently reported a similar slowdown in the recruitment of staff in Europe.

This third quarter was "difficult, with a slowdown in growth in many European markets," said Alain Dehaze, its general manager.

In France, its largest market, revenue was downward, which rose by 5% in the third quarter, after growing 8% in the second quarter and 10% in the first quarter.

"The market has calmed down everywhere, in logistics, in construction or in retail," Dehaze said in an interview with AFP.

The demand for temporary staff is still managed by industry and cars. The permanent layout has also increased by 30%, he said.

This slowdown has affected all major European markets, with revenues in Germany, Austria and Switzerland declining by 2% and on the Iberian Peninsula by 1% after a long double growth in Spain and Portugal.

Its growth also declined sharply in Italy, in the second market where Adecco experienced a strong expansion, with revenues rising by only 6%, compared with 17% in the previous quarter.

"Adecco's results show a clear and dramatic slowdown in temporary employment in all European markets," said analyst Vontobel Michael Foeth in a commentary on the stock that noted that the Swiss group had done better than its competitors in France, its key market in Europe.

Christian Weiz, an analyst at Baader Helve, estimated that these results were "solid" and noted that the group seemed to "adapt quickly" and "adjusted its costs to protect its margins."

In particular, Adecco has maintained its target of 50 million euros this year. In France, the reform of the tax credit for job competitiveness (CICE), which will turn into a reduction in durable costs in 2019, has nevertheless had a one-off impact on margins in the final quarter, the group said.

11.6.2018 14:49:40 –
Zurich (AFP) –
© 2018 AFP